Housing Recovery Hits Brick Wall

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Is the housing recovery dead in the water?

The latest news from Foreclosureland sure seems to say that, dealing a death blow to projections that a recovery was imminent. In January, new data shows, new home sales plunged 11.3 percent to a record low, according to the Commerce Department. That drop brings home sales to their lowest point in nearly 50 years, and comes at a time when economists were predicting an increase of around 5 percent or so from December’s totals. The budding recovery in the housing sector “has taken another big step back, even with the government aid,” said Jennifer Lee, an economist at BMO Capital Markets, in a research note. That aid, including the Obama administration’s multibillion-dollar Home Affordable Modification Program, its flagship relief effort, has done next to nothing to quell turmoil in the housing industry—turmoil showing little signs of abating.

Indeed, the housing industry appears to be at something of a crossroads right now. Just in the past week or so we’ve seen reports saying there are more “underwater” homeowners than ever before, at 11.3 million; that delinquencies (people late on their payments by 60 days or more) have been increasing for three years straight; but also that foreclosures are decreasing, according to recent data from the Mortgage Bankers Association, whose economist—perhaps prematurely—commented, “We are likely seeing the beginning of the end.”

Well, if this is third and final act of the housing crisis, which began with subprime meltdown back in 2007, than you’d better get comfortable in your seats because this act apparently has quite a long way to go.

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In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

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